How much time should you devote to choosing a health insurance plan? A survey by Aflac found that some Americans (24%) spend only five minutes or less – and many (41%) spend 15 minutes or less – on this important decision. That may be because 90% of employees simply stay with the status quo, choosing the same plan as last year. That can be a mistake, as your employer’s offerings and the plans themselves do change and there might be a better one for you in the offing.
Here we use as examples the Aetna and Cigna PPO plans offered by employers. The details of these plans, and others that you may be offered, can vary greatly. But the following tips for comparing plans will also help in decision-making for people comparing other policies offered by employers – as well as by healthcare.gov (the Affordable Care Act's Health Insurance Marketplace/Exchange) and sold on the individual market. Here’s how to get started.
Survey Your Options
The first step is to take another look at your choices. You’re likely to have a number (sometimes a big number) of health insurance plans available to you. For example, employees of the federal government who live in New York have a mind-bending 25 plans to choose from. And for many areas of the country, the choices are plentiful at healthcare.gov. However, private employers may offer only a handful of plans, and in some locales choices are much more limited. If there’s a newly available or expanded plan for your area, it pays to check it out and make sure the plan you currently use is still competitive. (Also, see Open Enrollment For Health Insurance Marketplace. You may also want to read Buying Private Health Insurance; although the 2010 Affordable Care Act has changed the age at which grown children must leave the protection of parents' insurance, most other points remain valid.)
Consider the Company
Aetna and Cigna, which we are comparing here, both insure a very large number of people. In 2013, Aetna ranked #4 and Cigna #7 in market share, according to data from the National Association of Insurance Commissioners reported by US News and World Report. While a large health insurance company is not necessarily better than a small one, it’s likely that with either Aetna or Cigna you will have a good number of doctors to choose from in your provider network, and that you will also be able to find people you know who have had local experience with the plans you’re being offered.
One distinction is that Aetna is a U.S.-focused company, offering group medical insurance in all 50 states through employers and also on the individual market. By contrast, Cigna is a global provider of health insurance for employers in 29 different countries. If you work abroad or travel significantly Cigna has a number of international medical Insurance policies.
Check How Plans Rank in Your State
Rankings of health insurance plans according to consumer satisfaction and other factors have become easy to access and use. NCQA, the nonprofit National Committee for Quality Assurance, creates detailed quality rankings each year of both the PPOs and HMOs available in various states. Consumer Reports also publishes the NCQA rankings, in somewhat more reader-friendly formats, and these are available free on their website
If your choice is between the Aetna and Cigna PPOs, the rankings reveal that both insurance companies are well regarded by consumers. Their scores (on a scale of 1-100) are identical or close in California, Florida and Texas. But in Vermont, the Cigna plan gets an 85 while Aetna gets an 81, falling down in the consumer satisfaction area. You can dig in a little deeper at the Consumer Reports website by using the compare tool to focus in on the plans you’re considering to see how consumers rate them on such matters as getting care quickly and specialists. Cigna leads on both these items in Vermont.
Find the Information Important to You
Is your biggest concern being able to afford the out-of-pocket costs when you use your insurance? If your bills seem very high, even though you have supposedly good insurance, a survey of consumer out-of-pocket costs by American Medical Association may shed some light. Based on a random sample of 2.6 million health insurance claims, Cigna enrollees paid the highest percentage of their bills (25.9%), while Aetna members paid a lower percentage (20.4%).
But perhaps you have some difficult illnesses in the family and you or your doctor has run up against denials for various health services. Overall, claims denials declined from 3.48% in 2012 to 1.82% in 2013. That year, Cigna had the lowest claim denial rate (0.54%), while Aetna had a higher (1.5%) claim denial rate, according to a AMA study of seven large commercial insurers.
Check With Your Local Providers
If you have doctors you like, you’ll want to talk with their offices before switching insurance. Many doctors and hospitals take multiple plans, so this may not be a problem. If you’re looking for new doctors, don’t just choose randomly from the insurer’s book of practitioners. Ask around! Work colleagues, neighbors, and healthcare professionals can give you real-life reviews of doctors in your area. Ask about their experience with physicians who accept the plan, how out-of-pocket costs mount up, whether they’ve had difficulties filing claims or having services denied. These factors can vary a lot by locale, so a colleague who lives in your area might know more that’s applicable than a colleague who works in another area of the country. It may take some time to gather a list, and then winnow out doctors to try, but once you do you can call their practices to ask about insurance plans accepted and doctor availability.
One more tip: when your care involves tests, consultations with specialist physicians or anesthesiology it’s important to make sure that everyone involved in your care takes your insurance plan. Using in-network doctors and services will keep your costs down.
The Bottom Line
Both objective sources, such as insurance plan rankings, and subjective ones, like the first-hand experience of your colleagues, are useful for choosing a plan. Rankings let you know how a plan rates with large numbers of consumers, but there’s nothing like questioning colleagues, friends or health professionals who have had experience with a particular insurance plan that’s among your choices.